The Lesson of Starrett City

The Lesson of Starrett City

East New York and its surrounding neighborhoods have long been associated with the worst ills of urban poverty: high crime, economic depression, unemployment. Like many other parts of the city in the early 1970s, the neighborhood experienced rapid decline as many former residents fled to places with more economic opportunity and social cohesion. Yet when an enormous housing complex named Starrett City opened on Pennsylvania Avenue in late 1974, new tenants from across the city rushed to move in. In a New York Times article from the month the complex opened, a woman named Eileen Riccio, who had moved to Starrett with her family from Ridgewood, Queens, described its allure: “You know what I like about this place? It’s a new concept in community living. The man who designed it must have loved people, because he didn’t leave anything out.” In the intervening 40 years, much about New York has changed, but in many ways Starrett City remains the same — a safe, affordable place for low and middle-income families to live.

Situated on the southeastern edge of Brooklyn, adjacent to East New York, Canarsie, and Jamaica Bay, Starrett City is the largest federally subsidized housing development in the nation. The 46-building complex is a classic “tower-in-the-park” development, with structures covering only 16 percent of the 153-acre site. The remaining 84 percent is devoted to outdoor recreational facilities, sitting areas, and playgrounds. The development has a 99.5 percent occupancy rate, and according to Devorah Fong, a spokeswoman for Spring Creek Towers, residents for the most part stay put. (The development officially changed its name to Spring Creek Towers around ten years ago, but its original name has held on among residents, staff, and most New Yorkers.)

Looking northeast toward Manhattan from the roof of 1310 Pennsylvania Avenue.

When visiting the development, it is possible to walk around the 153-acre site and observe how Starrett’s staff manages and maintains the complex from day to day. Bucking the popular image of tower-in-the-park complexes, which are often seen as undesirable or in a state of disrepair, Starrett feels beloved and well taken care of. By 9 a.m., the snow from previous night’s snowfall has already been cleared away by the building staff. Starrett’s residential and commercial buildings are heated by a private cogeneration plant, independent from Con Edison, located on the far eastern side of the development. The site is punctuated by playgrounds, some older, others more recent, like a toddler-targeted play area built a few years ago at the request of the tenant association. There is a 100,000-square-foot health and fitness center on the grounds, which includes a competition-sized pool. There are also three public schools on Starrett’s grounds. The management company, parents, and schools collaborate on after-school programming and activities, which include the Starrett Judo Club, a teen center, and an orchestra program, among many others.

In an era when almost a third of New Yorkers spend over half their income on rent and utilities, and the waiting list to get into public housing is measured in years, it would be easy to think of Starrett City as an anachronism, a relic of an era in which the city, state, and federal governments invested heavily in affordable housing. Increasingly, New York is a home for the wealthy, and many developments built to serve as low- and moderate-income housing have turned into market-rate housing. But as Mayor Bill de Blasio kicks off his first term, if he is to make good on his promise to fight income inequality in New York, he will need to heed the lessons of Starrett City. On one hand, the complex is proof that it is possible to provide safe, community-oriented affordable housing to a substantial number of New Yorkers. On the other hand, developments like it are not easily reproducible — the city simply lacks the open land and generous subsidies it once had. So what, if anything, can the city do?

Integrating Starrett City

When Starrett City was built in 1974, New York was struggling under the weight of a fiscal crisis, brought on by broader economic and political shifts in the country. The fallout from white flight and urban neighborhood deterioration — phenomena that were fueled by redlining practices among private mortgage lenders and the Federal Housing Administration, as well as systematic exclusion of people of color from private suburban developments — enveloped the city’s administration. Starrett City was to be constructed on a particularly contentious site, located on the edge of East New York — which experienced multiple racially fueled clashes during Mayor John Lindsay’s tenure — and adjacent to the conservative, white working-class community of Canarsie. According to a 2011 profile of Starrett City in Urban Omnibus, to get the project approved, Starrett Housing Corporation promised the city’s Board of Estimate that it would sustain a 70 percent white tenancy. The complex therefore maintained two separate waiting lists, reserving 70 percent of the units for white tenants and 30 percent for minority tenants.

In 1979, Open Housing Center, a fair housing group, brought a class-action suit against Starrett City on behalf of black applicants who had been denied tenancy in the complex. The lawsuit was later joined by the NAACP. The suit was settled in 1984, but major changes were not made to the waiting list. Soon afterward, though, William Bradford Reynolds, a civil rights lawyer for the Reagan administration, sued Starrett City in a new lawsuit, claiming the dual-waiting-list system was a violation of the Fair Housing Act. Reynolds, who was known for fighting affirmative action programs, saw any sort of quota program as “a sinister evil.” A federal judge ruled in Reynolds’ favor, stating that the Fair Housing Act prohibited applicants from being treated differently based on race.

As a result, Starrett’s management company was ordered to create one waiting list, based solely on the income requirements mandated by the government programs that had financed the project. Almost immediately, residents and the managing agent for the property expressed concern that the development would lose the relative racial diversity that had its been its hallmark from the beginning. Spencer Holden, a black actor and community activist living in the complex, remarked at the time, “I have lived all over New York and this is 1,000 percent better than any other neighborhood.” And Robert Rosenberg, the property’s manager, said, “When we started, the kids from different groups were at each others’ throats. Now that’s a thing of the past.” Management and residents of all races tended to fear that removing the quotas would upset the racial balance that had made Starrett City work for so many years, and in a 1988 New York magazine article, many residents said they would think twice about staying in the complex if its integration quotas were abolished.

Swimming Pool at the Brooklyn Sports Club, a full-service gym and community center on Starrett City’s grounds.

Since the 1988 lawsuit, the demographics of Starrett City have indeed shifted, though the complex remains far more diverse than the average subsidized housing development. According to the management company’s most recent count, Starrett City is 57 percent black, 27 percent white, 13 percent Latino, and 3 percent Asian (for reference, according to the U.S. Census, New York City is 33 percent white, 29 percent Latino, 23 percent black, and 13 percent Asian). Moreover, diversity is a source of pride within the complex to an extent that is not apparent in most other residential communities — affordable or not. During my site visit, Fong described a window display, from the late 1980s, at the bakery in Starrett City’s shopping center. The display featured a wedding cake with an interracial couple as the topper — a rarity in that era.

According to tenants, staff, and outside researchers with whom I spoke, Starrett City has evolved into an organic community over the years, fueled by onsite programs and facilities that encourage tenant engagement. The after-school, adult, and senior citizen programming is funded by grants sought out by the management company and organized by tenants themselves. Starrett City has its own bimonthly newspaper, senior services funded through the NORC Program, trips organized by the tenant association, and a college scholarship program for residents. There is a level of commitment from both the tenants and the staff to create a thriving neighborhood. Rebecca Caraballo, who has lived in the complex for 34 years and is the Starrett Tenants Association president, found that the complex was a great place to raise her kids, who participated in “afterschool activities that were available close to home, like the Judo club and the orchestra program.” In The Death and Life of Great American Cities, Jane Jacobs wrote about the concept of social capital that develops in organic neighborhoods and the self-policing that takes place in tight-knit communities. Starrett, with its tower-in-the-park design, is a type of planned development that Jacobs critiqued in her writing. But the community that developed in Starrett, facilitated by the types of programs Caraballo describes, contributes to the safety and stability of the complex.

A product of working-class New York

In a 2005 Village Voice article on Starrett City, John Giuffo, who moved to the complex as a child in 1984, described the development as a place that offers “a middle-class lifestyle to the working class.” According to a Citizen’s Housing and Planning Council study from 2007, 88 percent of the complex’s residents earned less than 80 percent of the area median income. Sixty percent of units in the development are covered by the project-based Section 8 program, which provides rent subsidies for very low-income tenants, meaning that many of Starrett’s tenants likely have even lower incomes. This kind of across-the-board affordability in a development with 5,881 apartments was made possible by a deep federal, state, and city commitment to the construction of affordable housing. The ongoing maintenance of the grounds, the power plant, and the buildings themselves, as well as the programming for residents, does not come cheap. A successful development for moderate- and low-income residents requires subsidies for both construction and operation — a fact the de Blasio administration will need to face as it attempts to build affordable housing.

In Working Class New York: Life and Labor Since World War II, historian Joshua Freeman describes postwar New York as a “social-democratic polity” in which the city’s worldview and culture were shaped by the working class. During this time the city, in conjunction with unions and other working-class institutions, put considerable resources into funding public works, education, health care, cultural institutions, and housing. The city played an important role in shaping state and federal urban policy, and enjoyed success at applying for and receiving federal and state funding, especially for affordable housing production. This era yielded the majority of New York City’s current affordable housing stock.

The development draws electricity from its own power plant, the Starrett City Cogen Facility.

Starrett City’s construction occurred at the tail end of the era of labor power, as the city was reshaped to become more market-oriented in the wake of the 1970s fiscal crisis. New York’s reorientation occurred in tandem with changes in the federal government, as Richard Nixon put an end to many New Deal and Great Society social programs.

The initial plan for Starrett City’s site was a middle-income cooperative called Twin Pines, which was to be constructed by the United Housing Foundation, a union-backed developer and a major force for developing moderate-income housing in postwar New York. But in 1971, UHF was forced to sell the project to Starrett City Associates, a private group of investors, due to a sharp increase in construction costs.

While the development’s conceit shifted with the sale, its design remained tailored to the city’s working class. Starrett City Associates took over the site plan of architect Herman Jessor, who specialized designing union-backed affordable housing. The generous financing package, assembled from city, state, and federal sources, allowed for a wide range of affordable-housing options. The city contributed the development site. New York State provided financing through the Mitchell-Lama program, which gave developers access to tax abatements and below-market-rate mortgage financing in exchange for a fully affordable housing development and a 6 percent profit cap. In addition, Starrett City qualified for a mortgage-interest subsidy under the federal Section 236 program, which reduced debt service payments, and a rental subsidy program for low-income tenants under the Rental Housing Assistance Payments program (later replaced by project-based Section 8 program).

For sale

To incentivize developer participation in both the state and federal housing programs, subsidy programs from New York State and the U.S. Department of Housing and Urban Development were developed with an opt-out option, usually at the end of a 20-year period. At the time of Starrett City’s construction in 1974, the idea that the property owner would want to opt out of a steady funding stream may have seemed unlikely. After all, Starrett City was in one of the toughest police precincts of a near-bankrupt city.

But by the mid-2000s, New York City had undergone a remarkable transformation. Neighborhoods where the city could not give land away for free in the 1980s were seeing multimillion-dollar sales. As Charles V. Bagli noted in the New York Times in 2006, “even bland brick buildings” like Starrett City were sought-after commodities. And just as the real-estate boom was hitting its peak, subsidized housing developments built under Mitchell-Lama and federal subsidy programs started to become eligible to opt out.

In February 2007, Starrett City Associates entered into an agreement to sell Starrett City to Clipper Equity LLC, a group of investors led by David Bistricer and Sam Levinson, for $1.3 billion. The scale of the bid would have prohibited the new owners from keeping the development affordable, making loan payments, and offering a return to their investment group. According to advocates interviewed for a lengthy article on the repercussions of the sale in the Brooklyn Rail, Starrett City would have had to leave its federal and state subsidy programs under the terms of the agreement. This pattern — overleveraging of affordable developments, leading to the need to rapidly raise rents in order to meet debt obligations — was well established by the time of the sale. And Bistricer had already earned a reputation for attempting to force longtime tenants out of their apartments in an attempt to raise the rent. (In 2005 he bought Flatbush Gardens, attempting to rebrand the solidly working-class complex as a haven for young professionals in the heart of Brooklyn, and came under fire from then-Public Advocate Bill de Blasio for tenant harassment and deteriorating conditions in 2011.)

The proposed Clipper Equity sale enraged many Starrett City tenants, who feared displacement from their homes. The Starrett Tenants Association joined forces, with the Association of Community Organizations for Reform Now to protest the sale. ACORN held a 1,000-person “We Shall Not Be Moved” rally and lined up political support to preserve the development’s affordability. Politicians ranging from City Council member Charles Barron to then-Mayor Michael Bloomberg criticized the sale. Using his authority as chairman of the Senate Housing, Transportation, and Community Development subcommittee, Sen. Chuck Schumer put pressure on HUD to intervene, and in an unprecedented action, the department used its oversight power to block the sale. A year later, the owners entered into a memorandum of understanding with HUD, local, and city housing agencies, agreeing to keep the complex affordable in exchange for a new subsidy and tax-abatement package.

The legacy of Bloomberg

The outpouring of support that kept Starrett affordable was tied to the unprecedented loss of affordable housing in the city. The Starrett sale offering came on the heels of the $5.4 billion sale of Stuyvesant Town and Peter Cooper Village to Tishman Speyer Properties and the real-estate arm of Blackrock, at the time the most ever paid for a property in the U.S. Originally designed as a middle-class development in downtown Manhattan, Stuyvesant Town, like Starrett City, was built with heavy subsidies by a private developer. Its construction, directed by Robert Moses and former Mayor Fiorello LaGuardia, represented a unique confluence of postwar urban renewal and the investment needs of the Metropolitan Life Insurance Company. Most of its apartments were rent-stabilized through the mid-2000s.

The developments’ politically powerful tenant association and local politicians organized against the sale, appealing for the city to step in. They attempted to find a purchaser who would commit to keeping the development affordable, even raising money for the tenants to purchase the development. But the Bloomberg administration ultimately declared the sale a private matter and refused to intervene.

By the time of the sale, Stuyvesant Town and Peter Cooper Village had aged out of their subsidy programs. The form of rent regulation that kept most of their apartments affordable is not a subsidy program but rather a legislative system affecting a subset of privately owned apartment buildings in New York State. And because Stuyvesant Town and Peter Cooper Village were not under HUD’s oversight — the department was established in 1965, around two decades after the complex opened — the agency that played a key role blocking the sale of Starrett City could not do anything to stop the sale to Tishman Speyer.

Rebecca Caraballo, president of the Starrett City Tenant Association.

The new owners’ plan failed spectacularly. They defaulted on the mortgage in 2010, and the complexes were handed over to CWCapital, a company that negotiated on behalf of the myriad of investors in the initial deal. Prior to the default, tenants sued Tishman Speyer for illegally deregulating units while receiving a J-51 tax abatement from the state, and won. The process for untangling the exact definition of illegal deregulation has not been straightforward. While the ruling was a significant victory for tenants, the complex remains in limbo, held as collateral by the lenders, until this day.

The Stuyvesant Town sale put a face on the decline of affordable housing in New York. By the end of the Bloomberg administration, the city’s supply of affordable housing had shrunk drastically. According to What New Yorkers Want from the Next Mayor, another report published by CSS, around 385,000 units affordable to low-income households were lost between 2002 and 2011, a number that represents almost 40 percent of the pre-2002 total. This figure includes skyrocketing market-rate prices in formally affordable neighborhoods, as well as subsidized and rent-controlled units that were deregulated.

While the Bloomberg administration did commit significant resources to affordable housing preservation and construction under its New Housing Marketplace Plan, these efforts failed to keep pace with the number of units lost. And even the affordable housing that has been preserved or constructed hasn’t been all that affordable. A 2011 report from the Association for Neighborhood and Housing Development found that about two-thirds of the administration’s affordable units are too expensive for the majority of New Yorkers.

Subsidy availability is a large part of the issue. Deep subsidy programs from the federal government, like the ones used to fund Starrett City, are no longer available for new construction due to sharp cuts to the HUD budget over the last 30 years. The majority of new affordable housing constructed since the mid-1980s has been funded through the federal Low Income Housing Tax Credit program. LIHTC is a capital subsidy program, limiting the degree of affordability that can be achieved.

The Bloomberg administration’s approach to housing policy and affordability has also played a role in the disappearance of affordable housing. According to urban geographer David Harvey, Bloomberg preferred to tout New York City as a site for luxury development, believing that an expanded tax base would increase the city’s ability to provide services. These policies have reshaped residents’ perceptions of the city and whom it welcomes. A recent survey by CSS found that New Yorkers overwhelmingly believe the Bloomberg administration was most beneficial to the wealthy. Voters coalesced around de Blasio’s candidacy because his campaign appealed to this discontent with state of the city. In June, de Blasio was quoted in a New York magazine article stating, “I see people suffering and feeling like they’re losing their grip on the place, and my job is to help New Yorkers live in New York. It’s not to clear the place out and see it fully gentrified.”

One of the primary proposals put forward by the de Blasio campaign to address the city’s housing crisis was the introduction of mandatory inclusionary zoning. Inclusionary zoning is an umbrella term for a set of programs used by cities and municipalities nationwide that either allow or require developers to build affordable housing in exchange for density bonuses, development cost offsets, or other incentives.

New York City introduced a voluntary version of the program in 2005, which offered developers a density bonus in exchange for making 20 percent of their units affordable in certain rezoned neighborhoods. The Bloomberg administration rezoned 40 percent of New York City, generating wealth for landowners and spurring development. Under the existing version of the program, however, many developers chose not to participate, calculating that the profits earned from building all market-rate housing would be greater than the density bonuses obtained through inclusionary zoning.

The voluntary program yielded 2,769 units in a little under ten years, most of which were either in Greenpoint/Williamsburg or on Manhattan’s West Side, according to a report published by City Council member Brad Lander’s office. Many developments participating in the inclusionary zoning program also qualified for other costly subsidies and tax abatements, including the 421-a tax exemption, 80/20 financing from the state, and federal low-income housing tax credits. These majority-luxury developments were deeply subsidized under federal, state, and city programs — a stark contrast to Starrett City, which also received deep subsidies but remains fully affordable.

What’s next?

The success of de Blasio’s inclusionary zoning initiative, through which the new administration hopes to create 50,000 new units over the next decade, will depend on a carefully written policy that improves on the existing program by making it mandatory, and does not create new loopholes that developers can exploit. Robert Hickey, senior research associate at the Center for Housing Policy, explains that effective inclusionary zoning policies generally have a few recurring traits, including “flexibility, compliance options that are tailored to local conditions, and lasting affordability.” He notes that it may not make sense to allow developers to pay a fee in-lieu of building affordable units, if there is not a lot of open land available.

Hickey’s point about lasting affordability is particularly poignant in the context of all the work that went into keeping Starrett City affordable in 2007. Short-term affordability contracts are “incredibly short-sighted, especially in cities where there are precious few places to create affordable housing in the first place,” Hickey says. “The housing market is likely to be even more expensive when the affordability terms expire.”

It is possible to achieve deep affordability with a mandatory inclusionary zoning program. Hickey cites the example of for-profit developers California, who frequently partner with mission-driven affordable-housing developers to produce inclusionary units. These developers are able to use other public resources to further lower the price of the inclusionary units. To achieve deeply affordable rents, production generally requires additional rent subsidies, like Housing Choice Vouchers (also known as Section 8 vouchers).

But while mandatory inclusionary zoning is one way for the city to capture value generated by public actions like rezonings, it will not address the city’s affordability crisis on its own. As Michelle Goldberg noted recently in The Nation, the success of inclusionary zoning in Williamsburg did not stop the neighborhood from rapidly gentrifying. At their core, inclusionary zoning programs are tied to the market, redistributing a portion of the value of generated by growing real-estate prices. They do not address the root causes of the city’s affordability crisis: aggressive real-estate investment practices resulting in the skyrocketing cost of land. The city’s policy under the Bloomberg administration was to welcome and encourage all economic development practices, even if they led to displacement — exactly what Starrett City’s tenants feared in 2007.

On the grounds of Starrett City.

Council member Stephen Levin, whose district encompasses parts of Greenpoint and Williamsburg, counts himself as a supporter of mandatory inclusionary zoning. However, in an interview stressed the importance of a greater commitment to preservation, particularly through strengthening and expanding rent-regulation laws. De Blasio has likewise proposed other measures, including stricter regulation of tax incentives, committing $1 billion of the city’s pension funds to the construction of affordable units, legalization of some basement units, and higher taxes on vacant land to spur development.

The mayor’s affordable-housing policy is still being written, but the administration has set a target of creating or preserving 200,000 units. This is a more ambitious goal than the Bloomberg administration’s original pledge to create or preserve 165,000 units, which, as Choire Sicha noted in The Awl, ended up relying heavily on preservation instead of the construction of new units. While developments of Starrett City’s scale may be difficult to reproduce — the city does not have access to the kind of land and federal funding that was available in the pre-Nixon era — its lessons about how to create community and broad affordability are still valuable. During the campaign, de Blasio described his vision for housing in New York City: “that new buildings aren’t exclusively for the wealthy, development reinforces middle-class neighborhoods instead of weakening them, and that the fundamental rights of tenants must be protected.” In order for his administration to fulfill this vision, it will need to ensure that affordable-housing developments receive the capital and operating subsidies they need. And it will need to insist that new housing, once it’s built and designated as affordable, gets to stay that way.

Oksana Mironova works for Tenants & Neighbors, a tenant advocacy group. Her work has appeared in Urban Omnibus, Progressive Planning Magazine, and Carolina Planning.

Jason Bergman is a freelance photographer and videographer. Originally from New Jersey, he now lives in Bushwick.

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The Junction

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Arrested Developments

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